Underwriting Foreign Risks...Foreign Risks. NEHOUA. October 13,2017. Chris Regione, AVP Underwriting...

Foreign RisksNEHOUAOctober 13,2017

Chris Regione, AVP UnderwritingKevin Glasgow, 2nd VP Claims

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Key objectives for session

2© 2017 Munich American Reassurance Company. All Rights Reserved

Understanding the definition of a “foreign resident” is complex

Explain that fraud can happen at any time in a policy life cycle

Provide view of facultative and claim experiences

Discuss that there may be anti-selective reasons to purchase a U.S.-based policy

What is a foreign national?

U.S. citizen residing in another country

Non-U.S. citizen, “green card” holder, residing in U.S.(resident alien)

Non-U.S. citizen, not “green card” holder, not residing in U.S. (non-resident alien)

U.S. citizen, resident alien, or non-resident alien travelling outside the U.S.


Treaty language


2015 lawful permanent residents

www.dhs.gov/immigration-statistics/visualization/2015

© 2017 Munich American Reassurance Company. All Rights Reserved 5

2015 nonimmigrant admissions

www.dhs.gov/immigration-statistics/visualization/2015© 2017 Munich American Reassurance Company. All Rights Reserved 6

Visa types – there are hundreds!

Insured with one of the following VISA types will generally be considered for coverage, based on the country of origin.

• H1 - B – Temp. Specialty Workers – Special Ability• H2 - A/B – Temp Workers – General Labor (Individual Consideration)• B1/B2 – Visitor Business/Tourist/Medical Treatment (Individual Consideration)• E1 / E2 - Treaty Trader/Treaty Investor • K1 / K2 - Fiancée or Fiancé of US Citizen / Child of K1 • L1 / L2 – Intra-company Transferee / Spouse or Child of L1 • O - - Temporary Worker with Extraordinary Ability • V1 / V2 - Spouse / Child of a Legal Permanent Resident

Intentions of insured must be to remain in the US for the foreseeable future, i.e. 24 months. If intention is to remain in US for less than 24 months, follow Residence Guides.

Student VISAS (F1,M1,J1) will be considered on a case-by-case basis. Illegal aliens or individuals in the US on asylum are generally not accepted.


Why do foreign citizens want a U.S. policy?

Stable currency

Politically and economically stable

Privacy/confidentiality concerns

More competitive markets

More options/lower cost

More capacity

More product offerings

Options/benefits

Tax reasons

More open market

Anti-Selection??


• Obtainment and verification of evidence

• Medical

• Financial

• Others (MVR, etc.)

• Pricing

• Regulatory

• Fraud

Where’s the risk?


Foreign risk cases as percentage of all cases


Total facultative foreign risk cases

3.0%2.8% 2.9%

3.5%3.3%

2.3% 2.3% 2.2%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

2009 2010 2011 2012 2013 2014 2015 2016

Comparison of foreign risk cases to all cases


Average face of foreign risks to all cases

2009 2010 2011 2012 2013 2014 2015 2016All Life Cases $1,693,247 $1,936,334 $1,695,258 $1,796,316 $1,709,633 $1,574,320 $1,680,116 $1,875,614Foreign Risk $2,772,336 $3,006,327 $2,652,239 $2,541,588 $1,904,161 $2,085,305 $2,828,858 $3,319,777

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

Aver

age

Face

Am

ount

Ratings as a percentage of all foreign risk cases


Foreign risk ratings

62.80% 65.38% 65.85% 63.93%70.24% 70.66% 70.59% 69.77%

3.33% 1.26% 2.00% 1.78%0.93% 1.22% 1.53% 1.41%

27.50% 29.19% 28.25% 30.79%26.45% 27.21% 26.80% 27.74%

6.37% 4.17% 3.90% 3.50% 2.38% 0.91% 1.08% 1.08%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2010 2011 2012 2013 2014 2015 2016

Standard Rated Decline/Postpone Pending

Munich Re global presence

•Sydney•Melbourne•Auckland

•Munich•Milan•Malta•Madrid•London•Paris•Moscow

• Sao Paolo• Santiago• Mexico City• Buenos Aires• Bogotá• Caracas

•Singapore•Hong Kong•Beijing•Shanghai•Mumbai•Tokyo•Seoul•Kuala Lumpur•Taipei City•Calcutta•Dubai

Asia Latin America

AustraliaEurope


Around the world

•Drug cartels / homicides•Ease of finding bodies•Documentation•Corruption

•Age discrepancies• Identification of bodies• Immature records system/ documentation

•Privacy laws•Large population of immigrants without documentation

•Human trafficking• Identification of bodies• Immature records system/ documentation

Asia Europe

LatinAmericaAfrica


Frequently asked questions

Are we seeing an increase in foreign deaths?

Yes

What countries are we seeing associated with foreign deaths?

We have had deaths from over 150 countries since January, 2006.

Where in the world?


Where in the world - count

Top 12 foreign death claims by lives

15

12

18

22

23

36

39

49

62

57

49

100

22

36

30

28

45

45

76

70

70

79

114

124

- 20 40 60 80 100 120 140

United KingdomVietnam

AfghanistanTaiwanGuam

Bahama IslandsIndia

CanadaHong Kong

ChinaPhilippine Islands

Mexico

2011-2016 2006-2010

2006-2010: 812 lives 2011-2015: 1,234 lives - an increase of 52%Count for 2016 is 250 lives

Largest increases: Vietnam 200% Philippines 133% Guam 96% India 95% Afghanistan 67%


Location of death, by continent


2016 U.S. non-natural deaths abroad(843 total deaths)

Americas60%

Australasia/Pacific3%

Africa4%

Asia17%

Europe13%

Middle East & Israel3%

Source: U.S. State Department

Causes of death


2016 U.S. non-natural deaths abroad(843 total deaths)

Air Accident, 1.0%

Drowning, 19.0%

Drug-related, 2.0%

Homicide, 17.0%

Other Accident, 14.0%

Suicide, 17.0%

Terrorist Action, 2.0%

Undetermined/Unknown, 1.0%

Vehicle Accident - Auto, 17.0%

Vehicle Accident - Bus, 1.0%

Vehicle Accident -Motorcycle, 5.0%

Vehicle Accident - Other, 1.0%

Vehicle Accident -Pedestrian, 3.0%

Source: U.S. State Department

Foreign death claims by insured’s attained age

0

100

200

300

400

500

600

0 - 19 20 - 29 30 - 39 40 - 49 50 - 59 60 - 69 70 - 79 80 - 89 90 - 99

Munich Re Claims: 2006 - 2015

Age at Death

# D

eath

s


Munich Re claims

Foreign death claims by cause of death

CIRCULATORY SYSTEM27%

NEOPLASMS23%

EXTERNAL INJURY POISON18%

ILL-DEFINED15%

RESPIRATORY SYSTEM5%

INFECTIOUS AND PARASITIC3%

DIGESTIVE SYSTEM2%

Other7%

Causes of Death


Key takeaways

A foreign risk is complex can be viewed differently

Prevalence of foreign resident risks have remained stable, but the amounts are increasing

Understand “where the risk’ lies with these insureds

Fraud can occur at the time of application or many years later

The world is getting smaller but foreign deaths are still a challenge

Don’t automatically assume policies cannot be contested after two years

Fraudsters may have spent many years and significant money planning their schemes

Look beneath the surface facts—verify the information AND its sources

Understand why a US policy was desired if a foreign national is involved

Know the customs and practices of the areas involved

Secure knowledgeable resources to investigate and listen to their advice—a cursory investigation will only spot the obvious frauds


Knowledge

Expertise

Expanding Insurability

EDGE

Competitive underwriting

Capacity

Turn to us first!

Foreign risk

Chris Regione, FALU, FLMI, FLHC

[email protected]

(312) 863-8252

Kevin Glasgow, FLMI, FLHC

[email protected]

(770) 350-3368

mailto:[email protected]

mailto:[email protected]

Underwriting Foreign Risks...Foreign Risks. NEHOUA. October 13,2017. Chris Regione, AVP Underwriting...

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